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: DoT’s request for the Cabinet to suspend the proposed amendment to Press Note 5 of November 2005 for FDI in telecom comes as no surprise, given the spirals various government agencies have got into. But the inability to reach consensus is unfortunate. Especially, when it is not the Left derailing the process. Why has a comprehensive position not been possible, to bring transparency to rules that were opaque—as the FM claimed had been done in the new policy? One of the first decisions made by the UPA government was to finally raise the FDI limit from 49% to 74%, after the NDA government had dithered for more than two years. The developments since then have only sent confused signals to a sector that could well be the best showcase for genuine reforms.
If different wings of government are unable to decide whether security norms should be uniform or differentiated across levels of foreign holding (PMO/DoT) or if FIPB or the department of company affairs should approve changes in board level officials (finance ministry/DoT), surely something is wrong somewhere. Even after DoT decided to leave security issues to another agency, there’s been no clarity. Inputs of the National Security Council Secretariat, which the PM had said would work on a National Security Exemption Act as ‘the sole umbrella law cutting across all key strategic sectors’, have not yet come in. Here, note how our BPO industry relies on its ability to remotely monitor and analyse sensitive data originating in other countries. So, other country reactions and global realities in managing networks need to be factored in. To cut ambiguity, the proposed bill should be modeled on the lines of the Committee of Foreign Investment in US (CFIUS), as announced. The US body vets proposals from the security point of view before commercial decisions can be taken. Here, note how our security agencies can’t even monitor a fraction of what is needed with their outdated resources.
Meanwhile, the deadline for compliance by telecom service companies has already been extended twice, and will now end on October 2. And top firms had undertaken substantial corporate re-organisation since last November, which FIPB had even cleared recently. The story spells utter chaos; not acceptable for a country seeking to optimise on its potential in the proven mode of liberalisation. Recall how many telecom players quit India because of policy uncertainty in areas such as access deficit...
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